Summary ADR consolidation

SUMMARY

Plac Powstańców Warszawy 1 tel.: +48 22 5560118 [email protected] Warsaw, Poland fax: +48 22 5560359 www.konsument.gov.pl

CONTENTSCONTENTS

Introduction Introduction 33

Country-By-Country Presentation

oo DenmarkDenmark 66

oo EstoniaEstonia 88

oo FinlandFinland 99

oo GermanyGermany 1111

oo German ADR-system in public banking sector German ADR-system in public banking sector 1212

oo Latvia Latvia 1414

oo LithuaniaLithuania 1515

oo PolandPoland 1717

oo Polish ADR system at the Trade Inspection offices Polish ADR system at the Trade Inspection offices 1919

oo Sweden: Sweden: National Board for Consumer Complaint in SwedenNational Board for Consumer Complaint in Sweden

2323

Final remarks Final remarks 2929


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INTRODUCTION

European Union aims at prosperity of its citizens through the strengthening of

consumers’ protection system. One of the very important elements of that system are

Alternative Dispute Resolution methods (ADR). The ADR bodies resolve disputes in

ways other than going to court, including arbitration, mediation, negotiation,

conciliation, etc. Courts should be the last resort for people involved in consumer

disputes. Extra-judicial proceedings are an alternative to litigation and can be

cheaper, quicker and less stressful. There is still plenty of untapped potential for ADR

to provide equitable solutions to business to consumer (B2C) arguments. The ADR

schemes in European Union vary from the Scandinavian model to the local initiatives

of arbitration courts in Spain. Because of the differences between schemes, legal

systems and at least legal cultures, there is a need of such clearing houses like

centers of the European Consumer Centers Network (ECC – Net). They plays an

important role in ADR promotion and development and, on the basis of practice,

when cross border disputes occur, their task is to provide consumers with information

about the procedures involved and to help them access ADR bodies in other country.

The centers also provide active assistance to consumers, who decide to bring their

dispute before a ADR body in different country.

The Baltic Sea Countries Seminars on ADR have been organized since 2005. The

purpose of those meetings is to gather European Consumer Centers’ representatives

from Baltic Sea countries to discuss the Alternative Dispute Resolution schemes, the

promotion methods and ways to develop and improve the ADR bodies in Member

States. This makes the exchange of knowledge more valuable.

Each of Seminars have its leading topic which determines the course of the debate.

The Baltic Sea ADR Seminars have already been held three times. The first one was

held in year 2005, in Stockholm by ECC Sweden. The participants presented

overview of existing ADR schemes in their countries that time. The second seminar


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was hosted by ECC Estonia and took place in the next year in Tallinn. It aimed to

introduce the best out-of-court dispute resolution practices in the light of those

successfully resolved with assistance of the ECC. The third meeting was organized

in Warsaw, by ECC Poland on 15th October 2007.

The third Baltic Countries Seminar on ADR brought together the representatives of

European Consumer Centers from the following countries – Denmark, Estonia,

Finland, Germany, Latvia, Lithuania, Poland and Sweden. This year the Seminar was

devoted to the problem of ADR schemes accessibility for European consumers. The

conference was opened by the President of Polish Office of Competition and

Consumer Protection. The speakers tried to highlight the ADR procedures in their

countries, the requirements, fees and also the availability of their domestic ADR for

citizens of other member states. The meeting was also attended by special guests

from ADR bodies in Germany, Poland and Sweden.

Eurobarometer researches conducted in 20061, indicates, that Europeans are divided

regarding facilities for resolving disputes with sellers. A considerable majority of

Europeans (42%) feel that it is easy to submit their claims against suppliers using an

independent mechanism. However, at the same time there is a significant proportion

holds the opposite view (37%).

New member state countries in particular tend to find it harder to resolve disputes

with suppliers through such schemes as arbitration, mediation or conciliation.

In contrast to the various forms of dispute settlement, a visible majority of Europeans

(45%) do not believe that resolving controversy with traders in court to be easy. Only

17% consumers asked about the best measures to protect them, pointed to their

right to take an enterpreneur to a court. Even more noteworthy is the fact that this

rate is even lower. On the other hand the high proportion of consumers with no

opinion concerning the level of accessibility court mechanisms also seems to suggest

that citizens are not very familiar with the possibilities of resolving disputes with

1 Consumer Protection In the Internal Market; Special Eurobarometer 252/65 - TNS Opinion & Social; Publ. September 2006


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traders. This applies both to ADR methods (21%) and to common court litigation

(22%).

This data seems to indicate the strong need for ADR promotion and information

among consumers.

Another point is that they present only the situation for consumers in Member States

of EU without focusing on cross-border aspects. In other words the survey doesn’t

reflect either awareness or the opinion of Europeans concerning the handling of

disputes at the super-national level.

Since the European Union has a strong policy of promoting ADR in cross-border

consumer disputes, the European Commission has undertaken a number of practical

initiatives to provide consumers with access to ADR services that meet adequate

procedural standards.

Initially the most significant element of that policy was the European Extra-Judicial

Network (EEJ-Net) created in October. That network was established to facilitate

consumer access to ADR providers in cross-border cases. Each country participating

in the network was required to set up a central contact point, or “clearing house”, to

provide consumers with information and support in making a claim to an approved

ADR scheme in the country where the business is located.

In January 2005, this network was merged with the European Consumer Centers as

“euroguichetes” to form one stop “European Consumer Centers Network” (ECC-Net),

with the aim of providing European consumers a full range of services from

information through to dispute resolution. All European countries belonging

to ECC-Net have established national clearinghouses to provide consumers with

assistance in locating and using ADR schemes.

In order to be included in the Database of ADR schemes run by the EU Commission

the ADR provider must be deemed to meet the standards set out in the 1998 or 2001

in the Commission’s recommendations.


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The core idea of the conference in 2007 was to outline to what extent presented

mechanisms are available for the stakeholders (first of all consumers but also

traders) involved in the EU Marketplace i.e. in cross-border disputes.

Key issues to deliberate in presentations were as follows:

- what kind of obstacles stakeholders looking for redress through out-of-court

proceedings come across,

- what kind of improvements were introduced or need to be arranged with

respect to ADR accessibility,

- What actually is the role of the ECCs at the ADR scope context,

- How do ADR mechanisms work and cooperate with a particular ECCs in

practice on the basis of concrete, individual cases.

Presentations of participants were focused on existing ADR with respect of key

criteria. As it was mentioned above thanks to presentations of the special guests it

was possible to bring participants closer to reality of the concrete ADR scheme.

Country-By-Country Presentation

DENMARK

The main public ADR body in Denmark was established in 1975. There are also 17

approved private complaints boards. The boards deal with consumers’ complaints

related with purchase of goods and services provided by businesses.

European consumers have equal rights to access Danish ADR bodies. If the

complaint is against Danish trader and the complainant is from other country

complaints boards can deal with the case. There are no serious obstacles for foreign

consumers to profit with the ADR solutions. Most of complaint boards are able to

communicate in English and if not the European Consumer Centre in Denmark will

provide them necessary assistance. There is a fee for consumers to pay into a bank

account. The fee is not high and serves as a proof that consumer is really interested

in solving the case.


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Private complaints boards were founded by businesses from some sector who want

to take the responsibility for solving consumer disputes. The rules for the schemes of

these type were set in cooperation with Consumer Council or other Consumer

organization. There are a number common criteria to be met by the private complaint

board consequently verified and approved by the Ministry of Family and Consumer

Affairs in Denmark. Such a scheme need to be independent and impartial, which

especially means that their chairman should be a judge and both the consumer and

business interest must be equally represented.

The national public ADR body in Denmark is a Consumer Complaint Board. It is

financed both from public means and from dues paid by consumers and business

organizations. The professionals’ participation in the ADR procedure is voluntary

though almost all companies agreed to participate. Despite this rule however the

case is dealt by the board even if the company doesn’t declare its readiness to

participate in the proceeding. The parties do not need to be represented by

professional lawyers. Board decisions are based on law. The whole procedure is

relatively fast and cheap.

All complaints from consumers concerning goods, jobs and services come under the

competence of Board. However there are some exceptions for areas covered by

private complaint boards, areas mentioned in national regulation such as real estate

or cars, complaints concerning goods and services with value higher than 13,330

Euro and goods and services which cost less than 106 Euro.

To commence the procedure the consumer pays a 20 Euro of admission fee in

Consumer Complaint Board. It is given back if the case is solved in favour of the

consumer or dismissed The professionals have to pay a fee of 330, 530 or 625 Euro

accordingly but only when the consumer succeeds. In addition the company pays

260 Euro if there is a need to hear an expert. Even though the company haven’t

agreed to participate in the case that fees must be paid anyway and it is enforceable.

Board decisions are not binding for the businesses but statistically approximately

85% of professionals comply with the solution.


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I case the company doesn’t comply boards’ secretariats have ability to help the

consumer to bring the case to the court. It also apply to foreign consumers. Moreover

names of businesses which haven’t complied with Board’s decision are published on

special black-lists on the Consumer Agency website.

To recapitulate her presentation representative of European Consumer Centre in

Denmark suggested a joint project to analyze in which European country there is a

most need for ADR development.

ESTONIA

The ADR scheme competent in the settlement disputes between consumers and

traders, is called Consumer Complaint Committee (CCC). It was established in

summer 2004. The legal basis for that scheme is the Consumer Protection Act in

2004.

The Committee consists of a chairman of the committee and members in the form of

representatives from business side and consumer’s side. CCC is competent to settle

disputes arising from contracts between consumers and traders if the parties have

not been able to settle the disputes by the agreement and if the value of the disputed

goods or services is at least 300 kroons (approx. 19 EUR). There are exclusions for

disputes arising from an event of death, physical injury or damage to health or

relating to the provision of health services or legal services, estate. Procedures

concerning those issues are regulated separately.

A consumer submits a written complaint to the CCC through the Consumer rotection

Board (the host organisation of ECC) in case of national cases or through the ECC in

case of cross border cases. A complaint submitted to the Committee shall be heard

at a committee session within one month. The hearings are oral. If the failure of the

parties involved to turn up at the hearing does not interfere with the procedure, the

hearing is held even if the trader refuses to participate or consumer is not able to

participate (in case of cross-border disputes). In case of cross-border dispute, when

the consumer is absent, the claim will be presented by representatives of ECC or the

members of ADR. The trader against whom the claim has been submitted shall either


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accept or contest the claim. The committee shall make a decision by majority vote

within five working days as of the date of hearing a complaint. A copy of a decision

shall be sent to the parties (trader and consumer) within two working days

A decision of the committee shall be complied within one month. If the company

doesn’t comply with CC decision the parties have the right to file an action to court.

The decisions of the committee are not binding. The Procedure is free of charge.

Statistically 174 decisions were issued in favour or partially in favour of consumer,

traders complied with 158 decisions, which is 90,8%.

During 2005-2007 CCC had 2 cross-border disputes. The Committee has the

competence to settle cross border disputes only related to traders operating in

Estonia. All the cross border disputes should be handled on the same basis as local

disputes. The language of complaint should be Estonian. The translation service and

assistance for foreign consumers shall be provided by ECC.

FINLAND

Initially there was presented a number a new developments introduced in Finland.

First of all the Consumer Disputes Board at the beginning attached have been moved

under the Ministry of Justice form the year 2005. On 1 March 2007 a new act on

Consumer Disputes entered into force and widened the competence of the Board. It

brought also some novelties such as landlord an tenant disputes and possibility of

solving group complaint.

Consumer form inside and outside of Finland have the same rights for solving

disputes in alternative way. There is no need for seeking an adequate ADR in

Finland, as the Finnish Consumer Disputes Board has general competence in all

consumer matters. The complainant has to be a consumer and the defendant a

trader, save in housing, landlord and tenant matters. There is a requirement for a

consumer to contact the company first.

The Board has right to reject a complaint if it is pending before a court, in another

ADR body, if trader is bankrupt or if court has already passed a ruling. A new thing is

that Board can also passed over the dispute if it is not deemed practicable to handle


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the case due to its complicated nature or difficulty to solve. The Board determines its

jurisdiction in international matters in the same way as regular courts (e.g. Brussels

Regulation, in flight cases the Montreal Convention).

There are no financial limits for consumers complaints and no fees. The languages

used are Finnish and Swedish, save the cases related to air passengers rights which

are handled in English.

Finnish Consumer Disputes Board is reliable what reflects in the very high

compliance rate – 80%. If the company doesn’t comply with the Board’s

recommendation it is blacklisted. The Board gives thorough and legally well-

reasoned recommendations which both, businesses and consumers can trust, and

creates case law. Proceeding before the Board does not preclude a court procedure.

There are some obstacles for consumers form outside of Denmark. It means mainly

language problems, as the Board working language is Swedish and Finnish. The cost

of translation could easily diminish the advantages of bringing the matter before the

Board. ECC Finland offers an assistance for foreign consumers in cross-border

disputes but has only limited resources for translation. All the handling process can

long even 6 to 14 months which sometimes can make the proceeding obsolete. The

Board can not hear the witnesses and recommendations are not enforceable.

10 ADR cases this year, 5 of which have been brought before the Finnish Consumer

Complaints Board

ECC Finland meets the Board twice a year and consults it frequently informally by

telephone on individual cases and matters of interpretation

The Board is extremely useful in developing case law – guides the municipal

consumer advisers, also the ECC often knows beforehand whether it makes sense to

send a particular matter to the Board

ECC Finland cooperates with ADR actively but it does not develop ADR in Finland as

the ADR-system has acted well since 70’s. In Finnish ECC opinion ADR

development shouldn’t be a duty of ECC-Net. ADR should be developed primarily

from a national perspective, but it goes without saying that there should be no

discrimination on grounds of nationality.


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The ECC clearing house role should be considered by the network and the

Commission. ADRs cannot be the answer to everything: consumer info and amicable

settlements even cheaper and quicker and crucial complements to ADR

GERMANY

There are several thousand ADR bodies in Germany as some sectors are legally

obliged to do ADR, e.g. chamber of crafts. German law haven’t given any quality

standards to Alternative Dispute Resolution procedures yet.

Specialised ADR bodies exists in following sectors: banking, insurance, car sales,

health, crafts, legal services, taxes, commerce, travel services. Funding of ADR

bodies can be made in different ways i.e. ADR in authorities (Bundesbank,

Bundesnetzagentur), as a private legal entity with state funding (Schlichtungsstelle

Mobilität) or as a private funding for ADR (Reiseschiedsstelle,

Versicherungsombudsmann). There are positive and negative aspects of German

ADR system. It is absolutely in favor of consumers that there are competent ADR

bodies for all kinds of complaints. Multitude of ADR guarantees competence in each

sector. Procedures are usually free of charge or have only got very limited costs.

German ADRs are generally accessible for all EU citizens. But in other hand the

diversity of ADR can be confusing especially for foreigners. Different codes of

procedure make ADR extremely complex from international point of view. Moreover

the documents often have to be provided in German. Ultimately companies are not

forced to cooperate and decisions are not binding.

As it was stated above from cross-border perspective the multitude of ADR may

cause problems and confusion for foreign consumers and make ECC-Net clearing

house role harder. There are no common quality standards agreed on yet, except

recommendation 98/257/EC. German ADR’s have no experience with cross-border

cases. Conciliation proceedings are often not adapted to cross border cases as some

of them include compulsory oral hearings.

Concluding it can be said that ADR in Germany has already got a long and well

developed tradition. The system provides Know-How in all kinds of industrial sectors


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but further centralization on a sector basis would be desirable especially for cross

border cases. Certain obligatory quality standards comparable to Recommendation

98/257/EC are absolutely necessary.

There was also presented two case studies. The first one related to the insurance

sector concerned the non-individually-negotiated clause in general conditions

considered to be void in cross-border and national cases. The second case related

to problems with foreign engineering opinion. Such statements are well functioning

instrument at the national level though cause problems in cross border cases.

German ADR-system in Public Banking Sector

The conciliation procedure of the Bundesverband Öffentlicher

Banken Deutschlands e. V. (VÖB) was established in 1992. Initially it was run on a

voluntary basis by two intra-association conciliators. In 2000 the conciliation task was

transferred to the German central bank with regard to disputes in the area of cross

border transfers. The legal basis of ADR procedure by VÖB has been fix by the

ordinance on the procedure for alternative dispute resolution concerning credit

transfers (art. 10 of Directive 97/5/EC from the European Parliament and the Council

on cross-border credit-transfers, 27 January 1997). In 2001 the conciliation task was

re-assigned from the German central bank back to the VÖB. The current customer

complaints system of the VÖB is supplemented by an out-of-court settlement with an

external ombudsman. It means that conciliation procedure is separated into two

parts. During following years the ADR procedure was reformed. The competences

was spread covering domestic credit transfers, the abuse of payments cards, and

next distance selling contracts of financial services become part of the ADR

procedure. Apart from that since 2003 all complaints have been be dealt with by the

external ombudsman in order to simplify the procedure.

Today the Ombudsman for public bank is Mr. Klaus Wangard, former Chairman of

the Higher Regional Court in Hamm.

Members of the VÖB participate in the conciliation procedure on a voluntary basis.

The scheme is set up to settle disputes both between member banks of the VÖB and


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between banks and customers. The case handling process is divided in a preliminary

procedure at the complaints board and the ombudsman procedure. The conciliation

procedure is written. However, the ombudsman is entitled to ask for an oral hearing

of the parties on the non-mandatory basis. The recommendation of the ombudsman

is not binding for both parties. The parties can accept or reject the proposal of the

ombudsman within six weeks. No reaction is considered as a rejection.

The procedure is free of charge for the customer. Personal expenses are not

refunded. The period of limitation is suspended by a pending conciliation procedure.

The duration of a conciliation procedure is between two and three months.

The complaints board publishes an activity report each year. Selected conciliation

proposals are published in an anonymous form.

Credit institutions in Germany (in the area of credit transfers) are legally obliged to

inform their customers about their competent ADR body. They usually inform

customers about this in the schedule of prices. Furthermore credit institutions shall

inform current and potential customers in writing about the competent ADR body if

they refuse to open a bank giro account for the customer or when they cancel such a

contract.

All consumer associations, debt counsellors, employment centers and the European

Consumer Centre inform about the competent ADR bodies.

The complaints board is headed by a fully qualified lawyer. He is assisted by a

secretary.

If the complaint is lodged against a bank that is not member of the VÖB the case is

transferred to the competent banking association or further advice is given about the

competent ADR body within the FIN-NET. If the bank is a member of the VÖB but

does not take part in the conciliation procedure the case forwarded to the German

central bank or the information is given that no ADR is possible

The complaints board examines the admissibility of the complaint. It checks whether

the claimant already lodged a complaint directly at the bank and is the claimant a

consumer. Complaints of professionals are accepted only when credit transfers or

abuse of payments cards are concerned. Later on the board tries to concrete of the


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complaint or claim and than attempts to solve the conflict at an early stage. The

percentage rate of complaints that is already resolved in the preliminary proceeding

lies between 50% and 75%. Half of the cases are decided in favour of the claimant.

The ombudsman role is to decide about the admissibility of the complaint. In case of

inadmissibility of the complaint the procedure is terminated by a final decision.

When the complaint is admissible, the ombudsman works out a conciliation proposal

for the parties. In this case the procedure ends after a deadline of six weeks. Within

the time limit the parties can accept of reject the proposal. Decisions concerning the

inadmissibility of a complaint as well as conciliation proposals are sent directly to the

parties by the ombudsman.

Averaged 30% to 40 % of the proposals made by the Ombudsman are in favour of

the claimant. 50% to 60% of the decisions which are in favour of the claimant are

accepted by the concerned banks. On the other side only 8% of the decisions where

the claimant loses the case are accepted by the consumer.

The main focus for the ADR procedure in VÖB lies in the field of mortgage credits,

account management, payments, current accounts for the public as well as tariff

rates and fees. The high amount of complaints in 2004 and 2005 is connected with

the reduction of the period of limitation from 30 to 3 years. The new period of

limitation ended for the first time by the end of 2004. The complaints wanted to avoid

the expiration of the period of limitation. The reason for the cutback of complaints in

2006 is the privatisation of the „Postbank“. Therefore the association of private banks

became competent for complaints against this bank. Cases concerning distance

selling on financial services did not occur yet.

LATVIA

There are four ADR bodies in Latvia. These are the Ombudsman of the Association

of Commercial Banks of Latvia, the Ombudsman of the Association of Insurance of

Latvia, the Public Utilities Commission and Consumer Rights Protection Centre. Only


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the last of them is notified under European Commission Recommendations

98/257/EC and 2001/310/EC.

The Ombudsman of the Association of Commercial Banks of Latvia is an ADR body

founded by the Association of Commercial Banks of Latvia. It was established in the

year 2002. The Ombudsman administers complaints regarding non-cash transfers,

transaction by means of electronic payments. The value of the complaint can not be

higher than 50 000 Euro. The case handling procedure can long from 2 to 6 months.

The fee is about 21 Euro. Ombudsman decisions are not binding they have

recommendatory character.

The Ombudsman of the Association of Insurance of Latvia was founded by the

Association of Insurance of Latvia. It was established in the year 2004. The body

receives complaints regarding life insurance compensations, help insurance

compensations, accident insurance compensations and proprietary insurance

compensations. The value of the complaint is limited respectively. The procedure

takes also from 2 to 6 months and costs 21 Euro. Decisions are made with

recommendatory character.

The Public Utilities Commission attached to the Ministry of Economics of Republic of

Latvia was established in the year 2001. The Commission handles with complaints

regarding public utilities issues (electronic communication, power industry, post,

railway transport). The value of complaints is undefined. The case handling

procedure starts from 1 month and it is free of charge. Decisions made by the

Commission are binding for the trader and enforceable. Commission can apply

administrative penalty in order to enforce the compliance with the decision.

The Consumer Rights Protection Centre attached to the Ministry of Economics of

Republic of Latvia was establish in 1998. The Centre consults consumers concerning

consumer rights protection issues. It covers all kinds of consumers complaint

including financial issues. The value of the complaint is undefined and the procedure

is free of charge. It lasts at least 1 month. The decisions are binding and enforceable.

The Centre can apply administrative penalty.


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LITHUANIA

The first Law on Consumer Rights’ Protection in Lithuania was issued in 1994. It was

amended in 2001 and than the National Consumer Rights Protection Board was

established.

The following ADR bodies are operating in Lithuania:

- The Communications Regulatory Authority of the Republic of Lithuania - deals with

consumer complaints about electronic communications, postal and courier services;

- The Insurance Supervisory Commission of the Republic of Lithuania - deals with

consumer complaints in the areas provided in the Law on Insurance;

- The State Energy Inspectorate at the Ministry of Economy and the National Control

Commission of Prices and Energy - deals with consumer complaints in the areas

provided in the Law on Energy of the Republic of Lithuania;

- The State Consumer Rights Protection Authority deals with complaints about

consumer issues which are not within the remit of the above mentioned institutions;

- Other authorities are entitled to deal with consumer disputes according to the

legislation.

The State Consumer Rights Protection Authority (SCRPA) was established in 2001

as the National Consumer Rights Protection Board, and renamed on 1st March 2007,

when the new edition Law on Consumer Protection came into force. The out-of-court

settlement of disputes is not the only function of the SCRPA. Since it was established

the out-of-court mechanism covering all the areas of consumer consumption was put

in practice.

The ADR procedure led by SCARPA is free of charge (with some exceptions). The

handling process is written, but the oral dispute resolution is also possible. The ADR

procedure is carried out under the adversarial principle and the principles of

effectiveness and transparency. Generally the case handling process is open to

public, with exceptions. The amicable settlement of the dispute is a priority. The

dispute should be resolved in 20 working days from the receipt of consumer’s

request. This time limit can be extended for 10 days, if necessary. The consumer

must contact the trader before addressing the ADR body and provide the proof of


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this. The ADR body refers to the company, asking for a justified clarification. Once

the ADR body ascertains the matter of the dispute and examines the available

evidence, it takes the measures in order to reach an amicable agreement between

the parties. The decisions are not binding to trader. Since 1st March 2007 the

SCRPA received requests only regarding faulty goods and services and the

unsatisfactory provision of tourist services. Within a short period the Authority made

42 decisions in the out-of-court cases.

The ECC role in out-of-court dispute settlement in Lithuania is to promote the

development of ADR schemes and to act as an intermediary between the traders and

the ADR bodies in the settlement of disputes arising between the consumer and the

foreign trader/ service provider. The ECC informs consumers of the possibility of

resolving their dispute under the ADR procedure.

The positive features of out-of-court procedures are cost-effectiveness, flexibility,

simplicity, it is less time-consuming and decreases the workload of courts by ‘shifting

out’ the simple and common cases. It also gives consumers more opportunities to

seek for redress. But there are also weaknesses as not binding nature of the

decisions. It may be difficult to change the common way of thinking that the redress

could be obtained only in court..

POLAND

Since the establishing of the ECC Poland in 2005 three schemes have been already

notified to the EU Commsion ADR Database. Polish centre attaches special

importance to the last notification of the Trade Inspection’s mediation. Experiences

seem to show that this scheme seems to be well adapted to the cross-border

dimension.

The supernational character of cooperation between ECC Poland and ADR were

depicted on the the basis of two case studies:


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Polish ADR system is composed of two main mechanisms functioning on the basis of

structure of Trade Inspection. Both ADR schemes have multisectorial capability.

There are five other consumer ADR schemes with sectorial competnce In Poland:

- Banking Ombudsman – arbitration

- Insurance Ombudsman - mediation and arbitration

- Office of Electronic Communications (UKE) - mediation and arbitration

- National Euro-Label certification body (the unit of the international Eur-label

scheme arranged at the Institute of Logistics and Warehousing) - complaint

commission.

Each of ADR system, except the Trade Inspection mechanisms, has a nationwide

scope. However the Head Office of Trade Inspection is the coordinator of the

mediation procedures in relation to cross-border disputes which occurred between

the EU, Iceland and Norway citizens and entrepreneurs having their registered office

in Poland.

The costs of mediation proceedings are very low (1€) or don't occur at all.

Arbitration may be more expensive and its price depends upon the selected system.

Proceeding before Amicable Consumer Court at Trade Inspection is free-of-charge

but the parties are obliged to cover the costs of expert opinion. The fee is returned to

the party which will win the case.

In case of the proceeding before the Amicable Consumer Court operating at the

President of Office for Telecommunication and Post Regulation, the fee

approximately amounts into 20 €.

The application submission for instituting the proceeding before the Bank

Ombudsman requires incurring the fee in the amount: 8 €, and when the value of the

subject of dispute doesn't exceed 8, this fee is reduced to 4 €.

Instituting the proceeding before the Insurance Ombudsman may amount into around

3 € (value of the subject of dispute may not be lower than 250 €). In case when the

value of dispute is not established, the fee is settled by the super -arbitrator.


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Complaint Commission within the Euro-label system doesn't charge any fees for

inspection of complaints submitted for its participants.

ADR bodies provides support in cros-boarder disputes only within as a kind of bridge-

structure. In case of the Trade Inspectorate’s mediation, after acceptance of option

by a consumer, ECC Poland transfers cross-border cases to the Chief Trade

Inspectorate (TI). In the second move such cases are referred by the Head Office to

the competent local branch.

The consumer is informed about the details of procedure. Mediation procedure

conducted by Trade Inspectorates is free of charge, both for the consumer and the

entrepreneur - there are no financial limits fixed.

However costs of an expert opinion regarding the quality of a product or service , if

necessary, conducted on the consumer’s or entrepreneur’s demand are incurred by

the ordering party, unless the parties stipulate otherwise (each of regional Trade

Inspectorates run the register of expert specialist competent in cases from concrete

sectors of the consumer market).

The way of application for mediation’s institution is very flexible. It could be done in

form of written request by post or personally in the concrete trade inspectorate as

well as with appliance of distance means (by telex, fax or email). ECC-Net initiates

the procedure on the basis of cooperation between centers arranged with usage of

the IT TOOL.

However an application form is offered yet it doesn’t mean its usage is mandatory as

long as the consumer gives obligatory information.

Procedure is conducted in Polish language, though there is provided also information

on mediation procedure in English, available on the Internet website.

Mediators of Trade Inspection are of general competence with exception of areas

specified by legal regulations However at the same there are not specialised the

concrete branch of trade market, for example in clothing cases, vehicles, transport

services etc. It means that they hale a very wide and general scope of competence.

ADR of the Trade Inspection Offices


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Trade Inspection in Poland is the authority compounded with Chief Inspectorate as

well as local inspectorates 16 voivodships on the regional level with their

35 branches. The Chief Inspector of Trade Inspection is subordinated

to the President of the Office of Competition and Consumer Protection.

Trade inspectorates are mainly established for control of legality and reliability of

entrepreneurs conducting business activity. This competence anticipates inspection

of products and services placed in marketplace, including labelling, frauds etc. On

the other hand the Trade Inspection offices provides a framework for two ADR

schemes: mediation and arbitration.

Their another task is consumer counselling service. There are also a number

of different tasks imposed on trade inspectorates by legal regulations.

The key solution for cross-border consumer dispute resolution offered by trade

inspectorates has been for a couple of years mediation which is provided in

cooperation with European Consumer Centre in Poland. That mechanism was

notified to ADR Database at EU Commission in August 2007.

Mediation is conducted in line with principles of impartiality, transparency,

effectiveness and honesty identified in Commission Recommendation 2001/310/EC

of 4th April 2001, concerning the rules regarding extra-judicial bodies taking part in

arbitration of consumer disputes. Those principles were implemented by the

guidelines concerning on consumer disputes settlement in a way of mediation issued

the Chief Inspector of Trade Inspection, and also with the application terms of the Act

on Trade Inspection of 15th December 2000.

Each mediator is entitled to conduct procedure in cases concerning civil-law disputes

between the consumer and the entrepreneur. There are however a number of

exemptions. Mediation is not run when disputes concerns to:

- purchase of energy, financial services (banking, insurance),

- postal and telecommunications services,

- financial agency,


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- information technology,

- scientific analysis and education services, as well as

- health care and welfare services.

In the first half of 2006 Trade Inspection encountered 4 402 mediations. In this

number 2 946 (67%) results was resolved in fovour of consumer.

The vast majority of cases 3 955 ( 77%) concerned products like shoes, electrical

products, furniture, computer equipment, motor equipment. At the same time only

439 (10%) disputes was connected with services (housing, laundry, mechanization,

gastronomy, hairdressing and cosmetic services).

The body competent to conduct mediation proceedings is voivodship inspector acting

on the regional level. As concern to place of the action it could be carry out

optionally:

- in trader’s head office or place of business activity,

- in a trade inspectorate’s office,

- by correspondence, including email.

The procedure is initiated by a consumer application lodged with the Trade

Inspectorate, however in a few situations there is allowed so called mediation ex

officio - option used when consumer doesn’t submit an application orally or in written

(e.g. via ECC or via email)

Mediation procedure is free of charge for both parties. If parties demand an expert

opinion it need to be ordered at the expense of them.

Mediation procedure is conducted in Polish however the procedure could be partially

in English when the assiatnce of ECC-Net is kept.

Proceedings within mediation procedure can be conducted at the entrepreneur’s

registered office, or the place where his business activity is performed, at the

voivodeship inspectorate of Trade Inspection or its branches, or by correspondence,

including email.


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Application for instituting mediation can be submitted in a written form, but also orally

with protocol and .

So called mediation ex officio procedure is instituted in the case of lodging an

application for instituting mediation by telegraph, telex, fax, email or by means of

application forms placed on the Internet sites of the Office of Competition and

Consumer Protection, or through the assistance of European Consumer Centre,.

The parties can lodge applications and other documents In each all legally

acceptable forms, including email.

Mediation procedure conducted by inspectors is free of charge, both for the

consumer and the entrepreneur. However the costs of expert opinion regarding the

quality of a product or service conducted on the consumer’s or entrepreneur’s

demand by an expert of the quality of goods and services registered in the record of

experts kept by the voivodeship inspector of Trade Inspection, are incurred by the

ordering party, unless the parties stipulate otherwise.

The mediation parties have an access to the procedure without the obligation to use

a legal representative (public attorney, legal adviser or tax adviser). Though at the

same time the mediation parties can be represented or supported by a proxy being a

natural person at every stage of the procedure.

After instituting mediation procedure, there is recommended that dispute should be

settled in the possibly shortest term but it should not last longer than two month.

Case Study. Irish consumer bought a set of windows from a Polish trader in price

22.959 EUR. After the delivery it appeared that the size of some of the windows was

incorrect, which was reported to the retailor immediately by the consumer.

He requested the ordered windows to be provided. Because of the stage, which the

works in the building was in, the consumer decided to install the originally delivered

windows.

After installation, windows prooved to be greatly faulty (the water was getting inside

the building, frames were not solid).


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The consumer tried to resolve the dispute with the retailor, but came to no

satisfactory agreement. The harmed consumer lodged a complaint with the ECC-Net

demanding a „repair of the product or service”.

With respect to the Trader ECC’s suggestion referred to the consumer by ECC

Dublin he accepted the offer of the ECC Poland to transfer the case to the mediation

scheme at the Trade Inspectorate. The case was immediatelly closed by the ECCs

and transferred to the ADR body.

In result ADR body received the case documentation consisted with the application of

the ECC Poland based on the problem description made by the ECC Dublin in the IT

TOOL and the files related to the case, included into the IT TOOL record. The

mediation was carried out within 14 days.

I result of mediation the trader offered:

- delivery of balcoony doors made in line with measures orderd by the customer

- repair of the window fitting at the place of installation

- the renovation treatment (including the grounding of gaps, varnishing - in

pursuance to needs and conditions).

The consumer accepted the solution proposal related him by ECCs But the offered

services weren’t made finally.

The obvious disadvantage of the procedure could be always situation that despite a

settlement, such a solution is not obligatory for parties so they can refuse to follow it

even.

SWEDEN

National Board for Consumer Complaint in Sweden

The Swedish National Board for Consumer Complaint is a key element of the

alternative dispute resolution system in Sweden focusing mainly on the activity of the

National Board for Consumer Complaints. He pointed out that disputes can be settled

by other legal means too, such as mediation, conciliation and arbitration. None of

those means are however available through the Board.


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The mandate of the National Board for Consumer Complaints is to settle disputes

between consumers and traders or businesses arsing out of goods, services or other

utilities provided to the consumer.

Other important tasks the body:

- providing opinions on consumer disputes at the request of courts,

- supporting the local service for consumers

- informing consumers and businesses about the Board’s case-law.

The idea of establishing a national body for settling consumer complaints arose in the

1950’s. The rationale for this view was the experience that very few consumer

complaints were taken to court and that there was a need for the public to have

access to an agency that could settle disputes in an inexpensive, simple and

impartial and legally certain way in cases where the consumer and trader were

unable to settle the dispute amicably.

The Board was initially introduced on a trial basis and operated under the authority of

the Swedish Consumer Agency. Since 1981, however, the National Board for

Consumer Affairs has been separated from the Consumer Agency and is hence an

independent national authority.

Today the National Board for Consumer Complaints follows by the model of common

courtrs in many elements of structure as well as procedure applied in Swedish

common courts.

The Board is managed over by a President, assisted by the Vice-President. They are

trained judges appointed by the Government.

The disputes are handled by the Board’s Legal Secretariat. This secretariat is divided

into two sections. Each section is run by a Head of Section, case administrators (the

majority being lawyers) and administrative assistants.

The two sections of the Legal Secretariat take on disputes concerning various

categories of goods and services. Each dispute need to be classified into one of

thirteen categories.


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These categories are:

1. general goods and services (e.g. leisure equipment, timepieces, optics,

removal assignments),

2. banking/financial services (services rendered by banks, financial institutions,

financial intermediaries etc.),

3. housing goods and services (goods and services concerning housing and

electricity, e.g. carpentry, paintwork, construction or refurbishment of houses,

plumbing and heating),

4. boating goods and services (e.g. defective leisure craft, repair services and

boating accessories),

5. electronics (for instance TV, radio, mobile phones and other domestic

appliances and home electronics),

6. estate agents services

7. furniture

8. insurance services (e.g. disputes over insurance policies such as right to

compensation or level of compensation),

9. motor vehicles (disputes concerning for instance broken cars and motorcycles

and bad workmanship concerning such goods),

10. travel (complaints concerning scheduled and chartered flights, railway, coach

or boat services, package tours, e.g. delays, cancellations and lost luggage),

11. footwear,

12. textiles,

13.cleaning services (services provided by laundries).

The Board employs some 35 people. In addition to the staff employed on a full-time

basis, the Board has at its disposal a number of part-time lawyers working on specific

disputes, and other members. These are the Chairmen of Departments, external

legal officers and members of the Board. The latter category represents business

interests and consumer interests. They are nominated by business and consumer


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organisations respectively, and appointed by the President of the Board. They are

hereinafter referred to as sector representatives.

An action before the Board always begins with the written complaint lodged with the

Board by a consumer. The consent of the trader is not required for carrying on the

procedure.

A case can only be accepted for consideration if the claim is above a specified

financial limit, unless the case is of interest in principle or there are special reasons

for deviating from the financial limit. At present the following limits apply:

- 500 SEK (matters relating to the shoes, textiles or general departments);

- 1 000 SEK (matters relating to the electrical, motor vehicle, travel, furniture

and laundry departments);

- 2 000 SEK (matters relating to the bank, boat, estate agents, housing and

insurance departments).

The Board can grant leave for handling the complaint although the redress sought

does not exceed the applicable level if it is of interest in principle or there are special

reasons for such a deviation.

The Board normally accepts consumer disputes where both the the trader is

domiciled in Sweden. In cases where a dispute arises out of the operation of

a company’s, or other legal person’s, branch, agency or other establishment situated

in Sweden, the Board would consider itself competent to try the dispute.

When matters relating to jurisdiction occur, it may be valid to seek leeway from the

Brussels I-Regulation, the Montreal Convention and other relevant legal instruments.

The procedure is written. Thus the parties may not appear in person before the

Board (in other words, there is no trial taking place), nor can the Board hear

witnesses.

The procedure is free of charge for the parties.


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The Board’s decisions are mere recommendations and thus not legally binding upon

the parties. A dissatisfied party cannot appeal against the decision. However, he or

she may request the Board to reconsider its decision. A decision will be reconsidered

only if certain criteria have been fulfilled.

For 2006, on average businesses complied with the Board’s decision in 79 % of the

settled disputes. With respect to some of the Board’s departments, the compliance

rate was 100 %.

A party wishing to pursue his or her claim in court will have to do so by their own

motion. The Board does not refer any cases to court, but provides general

information on the court procedure, if requested.

In deciding upon a case the Board applies the relevant law (legislation, general legal

principles, legal precedents etc.) or in case pf lack the regulation seeks leeway from

legal fields akin to that under which the dispute falls e.g. by analogy.

In 2006 the Board received in total 8 697 complaints and settled 8 694 cases (among

the latter however, were a number of cases received already in 2005). The Board

decided in favour of the consumer in 24 % of the disputes settled in 2006, in 23 % of

the decisions the Board dismissed the dispute (i.e. without trying the merits of the

case) and in 34 % of the decisions, the consumer lost the case.

Typically, when the consumer withdrew his claim this is the result of the dispute’s

settlement by amicable means. So, in reality, the result of a dispute is favourable to

the consumer in more than 24 % of the cases referred to above.

Last year, the Board received 70 odd complaints where the complainant was

domiciled abroad (in or outside Europe). In approx. 20 % of the cases, the

complainant had had contact with ECC Sweden; a few of the cases were referred to

us through FIN-NET. In about 175 cases, the defendant was domiciled abroad. The

latter category of disputes concerned, mostly, airlines, telecom businesses and e-

commerce businesses.

Last year, on average, the processing time took 182 days to settle a dispute in the

cases where the Board held a meeting, and 156 days when settled at the Secretariat.


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Budget

The Board is financed over the state budget. For 2007 the Board has at its disposal

appr. SEK 25 Million (appr. € 2.7 Million).

The main principle, as well as for other Swedish governmental authorities, is that the

procedure takes place in Swedish. Nevertheless, the Board accepts submissions in a

foreign language, provided that it is understandable to the Board and to the parties. If

one of the parties claims that he or she does not understand the language in

question (other than Swedish), the other party will be provided with the opportunity to

translate the documents. Otherwise the case may be dismissed. We have provided a

translated summary of the matter in some instances. This policy has been scrutinized

and approved by the Parliamentary Ombudsman in Sweden.

The Ombudsman held that in some cases it could be reasonable to provide a

translation. He held that it is for the authority in question to decide whether a

translation should be provided. The authority will have to consider, inter alia, how

important the matter is to the party in question. With respect to the Board though, in

assessing the importance of matters before the Board, the Ombudsman could not

disregard from the fact the Board’s decisions are not binding upon the parties. Our

policy hence stayed.

These factors being in favour of the trader are that, among others, th Board have

lead businesses to comply with the recommendations of the Board to a very high

degree. And of course, there is good-will to be gained if a company complies with the

decisions of the Board. There is high media cover of consumer affairs in Sweden and

companies contesting the decisions of the Board will in many cases be reported on

by the media. In addition, the Swedish Consumer Gazette publishes a black list twice

a year, which contains the businesses, or at least some of them, that have decided

not to comply with the Board’s decision. Appearing on such a list is not good for

business.


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Considering pros and cons of problem it need to be considered the Board has been

organised and operated very much the same way since 1968. Changes have been

made over the years for instance with respect to the scope of competence, i.e. the

categories of disputes the Board can try.

Especially the problems connected to cross-border disputes must be acknowledged,

i.e. jurisdiction, recognition of decisions, translation etc. These factors are a problem

to many consumers and if ADR is to be a true alternative for consumers on the

Internal Market, these questions will have to be addressed in a community context.

The chance for the solution of the issue is the work to follow the Green Paper on the

Review of the Consumer Aquis.

FINAL REMARKS

Both presentations given at the conference and the discussion held provided a good

deal of reflection concerning the issue of consumer ADR in cross-border dimension.

During the two previous seminars ECCs from the Baltic region had an opportunity to

become familiar with the work and organization of ADR schemes in their countries.

Participants of the seminars deliberated on the extent to which ADR mechanisms

make the ECC–Net stronger and more useful.

Apart from the consistent continuation of the previous direction the Baltic Sea

seminar in 2007 focused on the cross-border dimension of ADR issue. The question

of whether there still exists any vital reason for seeking cooperation and synergy

between ECCs and ADR seemed to be wellworth of considering and this need to be

followed up in the future ECC-NET activities. The rvrn more relevant in light of the

fact that the present consumer strategy embraces future action aimed at

acknowledgement of the ADR tool.2

2 Annex I, Action 10 Actions on information, advice and redress, including: 10.1. Monitoring the functioning of alternative dispute resolution schemes and assessing their impact (Decision No 1926/2006/EC of the European Parliament and of the Council of 18 December 2006 establishing a programme of Community action in the field of consumer policy (2007-2013); Official Journal L 404 , 30/12/2006 P. 0039 – 0045)


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The meeting revealed that the question on accessibility of out-of-court mechanisms

both for consumers and entrepreneurs in the Common Market still remains open as

well as the fact that sort access to justice in the Common Market seems to be a kind

of challenge for the future rather than an actual state existing today. The Danish

ECC suggested that it would be useful to arrange a joint project for that purpose. In

consequence participants agreed that the first stage is to consider to what extent

ADR bodies are an effective and helpful tool both for consumers and ECCs.

Simultaneously this year’s seminar was a good reason to consider of the question to

what degree ECCs can be involved in policy making regarding ADR development.

Participants agreed that raison d’etre of the ECC-NET is among other things to assist

the national authorities in the promotion and development of new out-of-court

schemes3. This doesn’t mean that they can take over the functions of the relevant

authorities. The only thing the national authorities really require is the assistance of

the promotion and adequate support in developing new out-of-court schemes. On the

other hand the ECC Poland indicated that centers in the new members states play a

much more active role in the developing of the ADR mechanisms, which are

predominantly weak or simply non-exist.

3 See: Annex III to the APPLICATION FOR A GRANT IN THE FRAMEWORK OF ACTION 9 OF DECISION N°20/2004/EC: Article 8 Objective 5 ADR developement p.2.c.


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Summary ADR consolidation

Government & Nonprofit

Transcript of Summary ADR consolidation